The Average U.S Homeowner Gained $56,700 In Equity Growth Over The Past Year (Statistics through 3rd Quarter of 2021
Arizona Home Owners Gained Even More Equity Growth Of $92,000. Only California, Washington, and Hawaii had larger gains. Home Equity Is The Difference Between The Current Value Your Home Minus Your Mortgage(s) Debt. For Example, Your Mortgage Debt is $300,000 and The Home Is Worth $575,000 Making Your Gross Equity $275,000. To see your state growth click link below.:
Conventional Loan Limits For 2022 The Largest Increase in 50 Years!
Home Prices have risen dramatically and the new conventional loan limits are reflective of this increase. The new single unit limit for 2022 allows borrowers to use conventional conforming mortgage financing rather than going to Jumbo Mortgage Pricing and qualifications, which can have higher standards and slower closing times.
FHA Mortgage Loan Limits Increase for Maricopa and Pinal Counties for 2022.
Rising from $368,000 in 2021 to $441,600 for 2022 is a dramatic increase. FHA Only Requires 3.5% Down Payment On The Home Which Especially Helps First Time Buyers. Interest Rates Are Still At Historic Lows Giving Buyers More Buying Power. If you live in a different area of the state or the country you can search for your mortgage limits at: FHA Mortgage Limits
Thinking of Buying A Home In 2022.
Keep in mind owning your own home is a long term investment. Or are you considering selling your existing home and buying another. The average homeowner used to move every 5-7 years. The time today is running 8-12 years. Over time your home will increase your personal wealth! Interest Rates are still at historic lows giving your greater buying power.
For most consumers the equity growth in your home is the major source of the growth of your wealth. So before you refinance make sure it makes sense. Especially, if you are considering taking Cash Out and Converting Your Personal Wealth to Long Term Debt
Things to Consider if you are looking to refinance. Here is some Information From Lizy Hoeffer At Cross Country Mortgage. The Links below takes you to a Great Blog Article and Videos.
“First, let’s talk about why people refinance in the first place. The most common reason is a better interest rate (and as a result, a lower payment). Then there are some people who choose to take equity out- people do this to invest in other assets, home improvement, debt consolidation, etc. Another reason people refi is to change the duration of a loan term, and finally many people want to drop PMI.
So it’s important to pay attention to the relationship between the interest rate you’d have with the refinance, and the one you already have. My personal recommendation is that for it to make sense for you to refinance, you should be saving either a whole percentage point, or at least 200 dollars off your monthly payment.
This obviously depends on what you plan on doing, but if you’re not going to see significant monthly savings from refinancing, it might not make much sense!
When talking with people about refinancing, one of the first questions I ask is “how long do you plan to own this home?”. The reason for this is because if you don’t plan on owning the property for a long period of time, the cost might not be worth it! So often I see people refinance, then decide in 6 months or a year that they want to sell (for whatever reason) and then they never actually recoup the benefit of the refinance.
There are also some people that choose to refinance year after year… they’re constantly rate shopping and end up shaving off 50-100 bucks a month each time they do it. But they’re incurring costs and usually lengthening the term of the loan every time, so they’re not actually saving in the long run!
If you hear nothing else from this, please take away this: If it isn’t a significant savings relative to the length of time you plan on being in the home, DON’T DO IT!!!
When it comes to costs associated with a mortgage or refinance, there are two kinds: Single and recurring. Single costs are the mortgage and title, transfer fees (if there are any), etc. Recurring costs are things like taxes, insurance, and interest.
When we talk about the cost of a refinance, we’re talking about those single costs. The actual money it takes to do the refinance, and not the typical recurring costs that are part of your monthly payment.
So when considering if a refinance is worth the cost, I like to use this simple equation: Divide the monthly savings you will see by the cost of the refinance, which will tell you how long it will take you to break even in terms of cost. My personal advice is that if it will take longer than four years to break even on the cost of the refi, it’s not worth it! This goes back to timing… evaluate how much longer you will be in this home, and make a decision from there.
- Current interest rates vs. what you already have,
- The length of time you plan to own the home
- How much the refinance will it cost”
Common Reasons to do a Cash-Out Refinance:
1- Debt Consolidation 2- Home Improvements 3- Leveraging Debt for Future Investments
Before Refinancing Watch These Blog and Videos From Lizy Hoeffer First!
If you’re considering buying or selling a home, contact us now to schedule a free consultation. We’ll work with you to develop an actionable plan to meet your goals. Whether you’re ready to make a move or need help weighing your options, we’d love to help. We can determine your current home’s value and show you local properties that fit within your budget. Or, if your heart is set on a second home in another market, we can refer you to an agent in your dream locale. Contact us today to schedule a free, no-obligation consultation!
Call or Email: 623-332-7755 or Jamie@JamieLevy.com